Ep 223: Profit Isn't An Accident Part 1 - You're Billing. So Why Aren't You Profitable?

Episode Summary

Most interior designers think they have a revenue problem… when they actually have a tracking problem.

In this kickoff episode of the Profit Isn’t an Accident mini-series, Michelle Lynne pulls back the curtain on what’s really happening inside your projects financially—and why “busy” doesn’t always mean “profitable.”

If you’ve ever wrapped a project and hoped you made money (instead of knowing), this episode will hit home. Michelle shares a behind-the-scenes story from her own business that reveals how small, overlooked gaps in procurement tracking can quietly drain thousands from your bottom line.

This isn’t about working harder or booking more projects. It’s about building systems that give you clarity, confidence, and control over your profit.

What You’ll Learn

• Why revenue isn’t the problem (and why more projects won’t fix profitability)

• The critical difference between having your books done vs. actually knowing your numbers

• Where profit is really won or lost (hint: it’s not at the project level)

• The biggest hidden profit leaks in interior design firms:

  • Reselects and revisions that never get rebilled

  • Freight and receiving costs that quietly get absorbed

  • Vendor payment timing mistakes

  • “Shadow items” that never make it into your financials

• Why spreadsheets eventually break down as your firm grows

• How fragmented systems create errors, double entry, and lost profit

• The power of real-time procurement tracking (vs. after-the-fact reconciliation)

• The mindset shift from “designer who runs a business” → “business owner who designs”
  

Key Takeaways

• Profit isn’t something you feel—it’s something you track.

• If your margins are leaking, more volume just creates a bigger leak.

• The real problem isn’t mindset—it’s systems and visibility.

• Item-level tracking is the only way to truly understand profitability.

• Clarity in your numbers creates confidence in your decisions—and more freedom in your creative work.
  

A Story You Won’t Forget

Michelle shares a pivotal moment from her “chaos era,” when two team members gave conflicting answers about the same project’s financials.

That disconnect revealed a deeper issue:
👉 Multiple systems
👉 No single source of truth
👉 Money slipping through the cracks

That moment led to a complete overhaul of her procurement and tracking systems—and ultimately changed how she runs her business.

Action Steps

If you do nothing else, do this:

1. Audit Your Last Project

• Can you clearly see your margin line by line?

• Not just total profit—but furniture, freight, custom, etc.

2. Map Your Current System

• Where does procurement live?

• Is it connected to billing?

• Are you entering data in multiple places?

3. Identify the Gap

• If you can’t easily answer these questions, that’s your opportunity.
  

Mindset Shift

“Clarity on the business side creates space on the creative side.”

You don’t need to become an accountant.
But you do need to be the person who insists on knowing what’s happening financially in your business.

Resource Mentioned

Michelle introduces The Profit Mixer—an all-in-one system designed specifically for interior designers to manage:

• Procurement

• Project management

• Proposals & purchase orders

• Financial tracking & reporting

Including her proprietary 16-step project process to protect profit at every stage.

Learn more: thedesignbakehouse.com/profit-mixer

What’s Next

Next episode:
The Markup Myth — Why “cost + 30%” isn’t a real pricing strategy (and what to do instead)

Share the Episode

Know a designer who’s busy but not seeing the profit they expected?
Send this episode their way—it might be the shift they’ve been needing.


Transcript:
Hey y'all, welcome to Profit Isn't an Accident. Profit Isn't an Accident is a mini-series for interior designers who are done winging it on the business side and ready to actually understand what's happening inside their firm. So this is just a little segment of design for the creative mind. And if you're new around here, I'm Michelle Lynn.

If you've been in my world for any amount of time, you know that I run ML Interiors Group here in the DFW area, and I teach interior designers how to build profitable business through the design bakehouse. And I'm genuinely a little bit obsessed with the operational side of running an interior design firm. I will admit that. This is the stuff that most designers don't want to talk about because it's not pretty. It's not on Pinterest.

and it doesn't photograph well. Trying to fix my monitor here. There we go. But it's the stuff that determines whether you actually make money or that you just look like you do. The series is called Profit Isn't an Accident because that's the truest thing I know about this industry. Designers who are profitable, the ones who are building firms that actually sustain them financially, y'all, we didn't stumble into it.

these designers get intentional. They get curious about their numbers. They stop treating the business side like a necessary evil and started treating it like an actual product that they're running. So that's what we're doing here in the next few episodes. We're going to go deep dive into a piece of the puzzle. We're gonna talk about procurement, pricing, systems, hiring, the whole picture, okay?

And we're going to talk about it the way I wish someone would have talked to me about it. Because, y'all, I've made every mistake in the book.

Okay, let's get into it. So here's where I wanna start today. And I want you to sit with this question for just a second before I dive in. When a project closes, like really closes, like everything's installed, the client is like crying happy tears, you've taken your photos, it's done.

Do you actually know if you made money on it? And I don't mean, did I invoice more than I spent? Because that's a low bar. I mean, do you know line by line, item by item, what your actual margin was on that project? Do you know which vendor came in over budget? Do you know which reselect cost you two weeks and a freight charge that you never recovered?

Do you know if what you build for procurement management actually covered what procurement management cost you in time and overhead? Most designers don't. And here's the thing. It's not a character flaw, y'all. It's not a sign that you suck or you're bad in business. It's basically just a sign that nobody taught you to track your business that way.

Most of us came into this industry through the design side, right? We're good at this or we went to school for it. We learned to pull rooms together, present concepts, manage clients, coordinate contractors. The financial architecture of the business, it's kind of an afterthought. It was for me too. And quite frankly, y'all, it's not my favorite part. It is once I get to it, but getting there is sometimes difficult. It's kind of like going to the gym, right? Like you really feel good.

once you get to the gym and you're sweating and you're building your muscles and you feel really good when you're done. But sometimes just getting my shoes on and getting there is the hardest part. And that's how I feel about some of the financial aspect. So.

There's a difference between having your books done and actually knowing your profitability. And that gap, that space between the two is where a lot of designers are quietly losing money every single month. And I know, because I was that girl. So today what I wanna do is pull that gap open and show you what's inside of it. I'm gonna try to do it through a story because this is something I didn't figure out in theory.

Okay, I figured it out by living a really eye-opening season in my own business.

So let's go back, okay? Let's just call this the chaos era. Okay, we're gonna do the eras. And I was growing. I had two, three people on staff, two designers and an office manager, okay? We had more projects than we'd had before.

There was Debbie and Megan. Lori was the office manager. On paper, y'all, things looked like they were really working. Revenue was coming in. Clients were happy. We were busy. Genuinely, consistently busy. And I kept thinking, this is it. This is the season where it all clicks into place financially. But it didn't. Wah, wah, wah. And I couldn't figure out why. Because every month I would sit down and I'd feel this kind of low grade anxiety.

You know the one it's like, don't want to do this. I just looked at the numbers. I didn't fully understand it. It wasn't clicking like I was billing. We were collecting, but the bottom line wasn't reflecting what I thought we were doing. Like we were busy y'all. And for a while I just told myself this is a revenue problem. I just need more sales. I need more projects. I need more volume. And surely if I had more projects or they had bigger budgets or whatever, the margin would show up.

This is one of the most common and most expensive stories that designers tell themselves.

By the way, I just need more, like more clients, more projects, more revenue. But if your margin is leaking, more volume doesn't fix it, you just get a bigger leak, right? So here I was growing, busy, confused about why profitability wasn't following. And then, you know, like with everything, I just had this reckoning. It happened because there was a situation, I can still picture where I was in the studio.

So Debbie and Megan.

Well, this is kind of this is the kind of thing that doesn't happen in theory, right? It happens on a random Tuesday at two o'clock when you're trying to close out a project. Debbie was managing procurement on one of our larger projects. Megan was handling client communication and billing on the same project. And then there came this moment, this very specific, very frustrating moment where I popped my head up and I said, hey, where are we on the Harrington project? OK, what's been ordered? What's still outstanding?

And what's do you know what our margins looking like? And I was sitting here, they were sitting over to my right, they both popped their head up from their from their desks and they both had an answer. But the problem was the answers didn't match, y'all. The answers did not match. Debbie had one set of numbers based on what she'd been tracking through her ordering process. OK, and Megan had a different picture based on what she'd been billing to the client. And I had to sit there and figure out,

which one of them is accurate? Are either of them accurate? And what I discovered in that process was that we were tracking procurement in multiple places. Things were being noted in emails and spreadsheets on our project management tool, but none of these places were talking to each other. So we had this fragmented, stitched together picture of our project financials. And within that fragmentation,

things were falling through the cracks. We had reselects that were being, that happened, but they were never, we never had our change orders, okay? They were never rebuilt. Freight charges that got absorbed without being passed on. Vendor credits that were being received, but never reconciled against the original order. I mean, these were small things.

But small things across a full project schedule, y'all, this multiplied by the, I mean, multiply it by the number of projects that we had going on. That was insanity. It was real money that was leaking. And that was the moment that I stopped thinking that this was a revenue problem. And I started understanding that it was more of an administrative, more of like a tracking problem.

So let me define something here because procurement tracking can sound like a very boring accounting thing. And I want to frame it in a way that actually matters for your business. Procurement tracking at its core is knowing in real time, not after the fact, but knowing in real time what has been ordered, what it cost you, what you're billing the client.

and the gap between those two numbers. That gap is your margin. That margin is your profit, and the real time part is what a lot of designers are missing. Here's what I've seen happens instead. A designer places an order, or places orders over the course of a project, weeks, sometimes months, items can come in, they go to the receiver,

and they get installed. At some point, maybe at the end, maybe in the middle, someone sits down to reconcile the finances. Now, it could be the bookkeeper. It should be the bookkeeper. Technically, you really should not be doing a lot of your reconciliation. But you're looking, like the designer, you're looking at the invoices, you're looking at what was billed, you try to piece together a picture of how the project performed. But by the time this reconciliation is getting done, the decisions have already been made.

The orders have already been placed, the client's already been billed, the freight's already paid, the reselect is done or it's happening. And you're not tracking to inform the decisions, you're tracking to understand something that's already done. Like you're looking back historically. And usually when you find that after the fact reconciliation, usually you find surprises that are not good surprises. So real-time procurement tracking,

means that you know before a project closes whether you're on budget. It means that when a reselect happens, you can see immediately how it affects your margin for that project. And you can make a decision how to handle it. Do you absorb it? Do you bill it? Do you negotiate with the vendor? What? What do you do? So it basically means that your billing is tied to your order. So you're not chasing down what's been invoiced and what hasn't been.

It means that you're in the driver's seat financially and not going back and cleaning up after the fact. And this matters so much more than most designers realize, because the place where profit actually lives or dies in a design firm is literally at the item level. It's not the project level. It's the item level over and over and over and over again at the item level.

So let me say that a little bit differently. You can look at a project and think you made money because the total billed is higher than the total spent. But if you drill down and you look at the individual line items, if you look at the sofa, if you look at the pillows, if you look at the fabric for the pillows, like the actual items, you will find that certain categories were profitable and others were not.

You will find that the furniture was fine, but the custom drapery was a disaster. You'll find that the client's master bedroom came in great, but the kitchen remodel, ho ho ho, it ate through every dollar of cushion that you had.

If you don't have item level visibility, you don't know that. You do not know where you're making money. You have a very blurry aggregate number and a vague sense that things went okay. And I can tell you from experience, babe, that running a business on that vague senses, it's exhausting.

It's the thing that creates that low grade anxiety when you don't have clarity on your numbers. Your nervous system is always just a little bit braced. You're always kind of hoping that things are okay rather than knowing that you are. And clarity, y'all, clarity is available to you. I mean, hear me. This isn't complicated. It's just a habit and a system.

that so many designers have not been shown.

So let me get specific because this is where I geek out a little bit, okay? When I started tracing where we were actually losing money at the item level, I found a handful of places that showed up over and over and over again. And when I talked to Debbie and Megan,

they could see it with me. Okay, and when I talk to designers in my community, as I was starting to coach other people later after I learned what not to do, this is the same place that they find it too. Let's talk about reselects. Okay, when you have a revision, when you have a reselection, when an item gets discontinued even, or if it's backordered, okay, this process costs money, it costs time.

which is money, right? And it often costs, it can sometimes cost a restocking fee, return freight.

OK, and sometimes the reselection results in a different item, maybe a more expensive item than the original. And in the flurry of all of the details, oftentimes the difference does not get billed to the client. And again, maybe it's just because we were busy, the designer doesn't realize that they need to. Sometimes it's because they feel awkward about it, right?

And sometimes it's just because nobody was tracking it closely enough to catch it. And if you take that and you multiply it across five or six reselects over five or six projects, you're like, you're looking at real money, not just a couple hundred bucks, but potentially thousands, depending on the scope.

The second place LeaksLive that I have seen is in freight and receiving. This is one of those categories that feels so small on a single item that it's so easy to just let it go. You feel like you're nickel and diming your client. It's a freight charge here, a creating fee there, white glove delivery upgrade that seemed reasonable to approve at the moment, just like a hot shot delivery. Like, yeah, go ahead and bring that lamp. Everything else is here. We can wait for the...

You know what I'm saying.

But freight is one of the most under-tracked cost categories in procurement because it doesn't always arrive with a purchase order number. It arrives on a separate invoice sometimes, often from a completely different vendor and weeks later, right? And if your system is not designed to capture it and tie it back to the original order, it gets absorbed. Or if your system is not billing in advance and reconciling in your favor,

it gets absorbed quietly and repeatedly.

Now, here's a hard lesson that I learned, and that is vendor payment terms and timing. Okay, this is a little bit more nuanced. Some vendors will offer better pricing for early payment or net terms. It can actually be advantageous if you're managing cash flow well. Okay, but if you're not tracking payment due dates, if you're just paying invoices when they land in your inbox,

You might not be capturing those advantages and you might be paying late fees that nobody's accounting for.

You might be paying more than what you billed the client for because you were anticipating getting this deeper, I don't want to say discount, better pricing.

but then you miss the window. So you're paying more than you're charging the client.

Yeah, I know, kind of sucks. And here's the one, here's the one, two, three, fourth, I think that this is the fourth one. Okay. And I think this one might be the sneakiest.

And these are items that were ordered but never installed. Change orders that happened in the field, items that were received, assessed, and rejected and sent back, but the billing wasn't adjusted. Allowances that the client didn't use, but they weren't returned or they weren't credited. Okay, these are like shadow items. The stuff that happened and it was handled in the moment, but it never made it back to your financials.

So maybe you can relate to some of these, maybe not all of them, maybe you are like, my gosh, this is something I do, you know, all four examples.

Because what happens is that they don't individually look like a business problem, right? It's just a little bit here, just a little bit there. But as a pattern, as the consistent way that a firm handles procurement, add up. Y'all, they add up to a firm that is chronically underpaying itself for the work that it's doing.

Now, most designers who are trying to track this stuff, we know that there's different systems. Some of the systems are really clunky. Sometimes it's a spreadsheet. OK. So oftentimes it's a spreadsheet and I want to be careful here because I don't want to be dismissive about spreadsheets. Y'all, I love spreadsheets. I love the formulas. I love being the worksheets. I love being able to cross. I love being able to cross reference. OK, I love spreadsheets.

They're useful. They're free, pretty much close to free. They're flexible in ways that some other software might not be.

And I use spreadsheets for a long time and I still have coaching clients who still use them effectively. Okay, but spreadsheets have a ceiling. And most growing design firms hit that ceiling and they don't immediately recognize that that's what's happening. Here's what the ceiling looks like. It looks like multiple people needing access to the same document and the version control is becoming a problem.

like the save as, save as, save as with the updates.

and then the spreadsheet gets too big and it's unwieldy. Is that a word unwieldy?

It's just a pain in the ass to update quickly. Let's just say that, okay? So it looks like there's the key information's living on the spreadsheet, but the spreadsheet's not being connected to your invoicing or your ordering. So everything has to be entered twice. Once on the spreadsheet and once somewhere else. That double entry problem, same thing. And this is even the same thing with most project management, and by project management I mean design management software, is that there's double entry.

Okay, and that's something I'm gonna spend a whole episode on because it deserves its own conversation. But for now, I wanna just name it. When you're maintaining financial information in two places, you are paying someone to do the same thing twice. You're entering it into your system, they're entering it into your financial system. QuickBooks. You're also creating conditions for discrepancy and errors because two people entering information in two places do not always arrive at the same number.

It's not a people problem, y'all. It is a systems problem. So the spreadsheet era, here we go back to eras, right, in a design firm is a totally normal phase. least I'm gonna say it is. It's where most businesses start, but the mistake is treating it like a permanent solution rather than a starting point. Because the moment you have more than one person touching procurement, or more than four or five active projects at a time,

Y'all, the spreadsheet is working against you, more than it's working for you. Now, if you're a spreadsheet queen, there are exceptions, okay? But what I've seen is that usually what happens is it's not the designer that makes a conscious decision to upgrade their system. What usually happens is that we get burned.

Case in point, project doesn't reconcile. A discrepancy surfaces at the worst time, like when you're presenting financials to a client or sitting down with your accountant.

Let's just say a team member leaves and they take the knowledge that was never properly documented. OK, so it's in their brain. This is that's what happened to me. It's the crisis that forces the conversation about what the next level of infrastructure looks like. Like I didn't even know that there were soft. There was software out there for this.

So my goal is that I'd rather that you have this conversation before the crisis.

So what it feels like.

Like the emotional experience of running a design business. Y'all can probably relate to this where there's just so many moving parts. So many moving parts. I had no idea how many moving parts were in an interior design business when I started my business. I've said this before. I don't know if I would have had the guts to start my business if I knew how hard it was. Okay, but let's just talk about this little section of procurement because if it's not fully tracked,

It feels like chaos.

Okay, or if you're highly organized, it feels like controlled chaos. It's like you're holding it together through sheer personal will and through very thorough inbox management. It feels like you're always slightly behind. my God, like you finished one thing and immediately you're behind on another thing. I just emailed Hallie the same thing the other day. Hallie, a lot of you guys probably know her. She's been my right hand.

for the coaching business. Now she's helping me on the ML Interiors group side. And I was just like, you know, you get one thing done and it feels like there's another that is on fire.

The thing is that from the outside...

It doesn't look like a procurement tracking problem. It just looks like busyness. Okay. It's like the business is running you instead of you running the business. But people might look at you and I know they've looked at me in some of my, in some of my most difficult times and it looks like growth and it looks like a successful designer with a lot going on. And so like I know I would just keep going because the narrative around me was that I was doing great, but somewhere deep down inside.

There's this niggling sense that something isn't right, but you can't quite name it. Does that sound familiar?

Here's what's actually underneath all of this.

is that you're operating without information. You're making decisions about how to price the next project, about whether you can afford to hire, about whether or not to take on that big scope that's exciting but also terrifying. You're making these decisions without knowing your current projects are actually performing.

So decision making without data is decision making by instinct and hope and prayers.

And that's gotten a lot of good designers into pricing structures that do not sustain them. Hiring decisions that don't pan out and growth that looks like growth from the outside, but it feels hollow and exhausting from the inside. So the fix basically, y'all, is information. It's timely, accurate, item level information. Let's go back. It's item level information. I mentioned this earlier in the episode.

It's about how your projects are actually performing financially. When you have this information, something shifts. And I'll tell you, it doesn't just shift in your business, but it shifts in you because you stop being reactive and you start being responsive. Okay, it goes back to the thermostat versus the thermometer.

A thermometer is reactive. A thermostat is proactive. Okay, so you stop dreading the financial conversations or you stop dreading looking at your checkbook or your bank account and not seeing what feels like should be there. And instead you're going to start taking control. You're going to be that thermostat and set the temperature.

You're going to be confident in these conversations. You're going to be confident in your decisions. You stop feeling like you're always behind and you start feeling like you actually know what the heck is going on in your business. And that shift is totally available. It's not complicated to achieve. It's just specific set of practices and tools applied consistently.

so remember that story? The Debbie and Megan story? Let me tell you what happened afterwards. After that project, I think the Harrington project, I sat at my desk trying to reconcile two sets of numbers that should have been one, and I got serious about our procurement process in a way that I had not been before. Like, y'all.

Be gentle with yourself. Like, I could sit here and could beat myself up saying that I should have known better, but I didn't know. Ignorance is bliss, right? Until it's not.

So I got serious and it wasn't like somebody's gonna get in trouble. Okay. It was more of a, hmm, there's gotta be a better way. I'm sure this is a systems problem and we're gonna fix it.

So we overhauled how we tracked orders.

We got a system, a well-known system. I'm not going to name any names.

It was their first version. They've come up with a second version years ago. But we connected our procurement and our tracking to our invoicing so that billing followed from orders rather than being a separate process somebody had to remember to do. Okay, was all put into a system and then we created a standard operating process, a protocol.

for making selections, tracking it, proposing, billing. Same thing for reselects, how they got documented, revisions, how those got documented, how freight got captured, how credits came back into the system.

And y'all.

This was a lot of work. It required a tool that could actually support it.

and it required us to be disciplined about the process, especially when old habits wanted to creep in.

But what it gave us on the other side, and me especially, was clarity and confidence. And I could sit down at the end of a project and actually know, not estimate, not approximate, but know how it performed. I knew what decisions contributed to the margin and which ones eroded it. I knew what to adjust on the next project. And it gave me something that I hadn't expected.

which was truly the ability to make better decisions about the projects that we took on in the first place. Like I had no idea, and this is a little bit embarrassing to admit, but you we all have to start somewhere. I had no idea that even though if there was a kitchen renovation that had a higher budget, a higher spend,

that it was not as profitable as just a small furnishing project.

Okay, so I could see how my projects actually performed and I could start to see patterns, which types of projects are most profitable for my firm, which clients, which scopes, which price points. And that knowledge changes how I scoped out my projects, how I priced, which has a compounding effect on your profitability over time. And this is why I say that profit is not an accident.

The designers who are profitable didn't just happen to get lucky. Okay. They don't have clients that just have better budgets or they don't charge more than everyone else. bottom line is what happens is is that they have built systems that give them information and they use that information to make better decisions consistently. You have to carve time out to go over your financials. You have to have a CEO day. You have to have a CFO day.

where you're looking at the numbers, where you're looking at the details, you are planning based on your historicals into the future.

and

Let's zoom out just a second. Okay, let's zoom out just a second because I think that there's also something important to name here that goes beyond the mechanics of just tracking. There's a version.

of us as designers that say, am a creative. I am an artist. Numbers and systems are not my thing.

I outsource that. My job is the design. Okay, right? Does that sound familiar? Okay, guilty. And I understand that identity. I get it. Parts of it are true and worth keeping. Okay, being a designer, being a creative, being the person who holds the vision for a space is genuinely a skill and a gift, and it's a big part of what you bring to your clients.

But when that identity becomes a reason to stay disconnected from the financial reality of your business, it becomes expensive. It becomes the thing that allows the leaks to keep leaking because someone else is supposed to be watching the numbers, or the numbers will just work out, or we'll deal with it at the end of the quarter.

the designers who build profitable firms, and I've worked with enough of them to say this with confidence, is that they make a shift at some point from I am a designer who runs a business to I am a business owner who designs.

That, my friend, is not a small shift.

It changes what you pay attention to. It changes what questions you ask. It changes what you build. You don't have to become a financial analyst. You don't have to become an accountant. You don't have to love spreadsheets or find procurement tracking thrilling, but you do have to be the person who insists on knowing what's happening in your business financially. Like I look back at the old version of me who was relying on Debbie and Megan and I kicked myself in the booty.

It's my business. I have to be the person who insists on knowing what's happening in my business financially because nobody else is going to care about your profitability the way you need to care about it. And here's the thing. When you do make that shift, the creative part of your work actually gets better because you're not carrying the OK, the mental load of that financial anxiety into your design work.

You're not half present in a client meeting because you're worried in the back of your head about whether your last project made money or what their budget's going to be. The clarity on the business side creates space on the creative side. Let me say that again for the people in the back. The clarity on the business side creates space on the creative side. Okay, they support each other.

Michelle Lynne (28:01)

All right, so here's where I want to land this because I don't want to leave you with just a diagnosis. I want to leave you with a direction. Everything that I've described today, the leaks, the fragmentation, the after the fact reconciliation, the anxiety of not knowing. Y'all, it's not a mindset problem, it's a systems problem. And what I have to share with you to solve this problem is called the profit mixer. Here's what I want to be clear about, because for

Quite a while, the Profit Mixer was only available to members of the Interior Design Business Bakery or the Key Ingredients programs. It was essentially a members-only tool, but I'm opening it up. It's now available to any designer who needs it. There's no more gatekeeping, okay, regardless of whether you're in one of my programs, because the truth is the problem I've been describing today doesn't care whether you've gone through my curriculum. It's happening in design firms everywhere.

And you shouldn't have to jump through hoops to get access to something that can actually help. Now this is different. Okay, this is different in regards to the other programs that you've seen. This is an all-in-one business hub. It's built specifically for interior design firms. It's where your project management, your procurement, your proposals, your purchase orders, and your financial reporting all live together. Here's the difference.

It's in one place, it's connected to each other, and there's no double entry into QuickBooks. What I mean by that is that you're not entering things into ProfitMixer and then your bookkeeper takes information from the book ProfitMixer and drops it into QuickBooks. So you're not paying your bookkeeper to do what you've already done.

Okay, we'll talk about that double entry problem in a future episode, but for now, just know that the reason most designers are paying someone to enter the same information twice is because their tools don't talk to each other. They say they do, all they do is they connect. Okay, there's an API key that connects them, but they don't actually communicate.

Here's the piece that I'm super tickled about.

The one that's most relevant to everything that we talked about today is that built into the profit mixer is my proprietary 16 step process for running every single project. OK, it is not a generic checklist. It's not a template that you have to adapt from some other industry. This is the actual framework that I developed from years of running ⁓ ML interiors group. It's the steps that you take a project from proposal all the way through install and close out in the punch list.

I call it the 16 steps of sanity, okay? This protects your margin at every stage, every handoff, every order, every approval, every billing trigger.

and it's available for you and your team. So you can work from the same process every single time. And when it comes to the real time procurement tracking, this is not a spreadsheet, but it's also not some of the clunky softwares that I've used in the past. The way it's laid out, this was actually created. I'm white labeling it from a bookkeeper and a designer.

who designed this. It's intuitive, it's easy to read. You can color code it. Okay.

It's a structured process. That if you've been running your projects without the structured projects process and most designers are, this is what changes things. It's not motivation. It's not a better attitude about your numbers. It's a system that makes doing it right the path of least resistance.

Now you can go to thedesignbakehouse.com forward slash profit mixer. You can go to thedesignbakehouse.com, scroll all the way down to the bottom and you'll see the profit mixer as one of the little sub categories. Y'all, it's 98 bucks a month. There's some badass reporting. You can have up to 10 people on your team for no extra charge. there's no contracts. I'll put the link in the show notes.

But if you've listened to all of this and maybe you're nodding along, okay, because it sounds familiar. Maybe you're recognizing that your business is in the chaos era that I described that I've been through. Okay, or maybe you're in a point where you've got some tracking going, but you know it's not as tight as it should be. Here's what I want you to actually do this week. Because I'm not.

just interested in this being an interesting conversation or selling you the profit mixer. Like I want this to be useful. So the first thing is pull up your most recent closed project.

The last one that wrapped up, okay, everything's installed, the client signed off, you've taken the photos, maybe haven't. But I want you to try to answer this question. What was your actual margin line by line on that project? In the profit mixer, the one report that I have included for everybody that is so insightful.

is your profitability. Okay, there's other reports that you can do as an add-on, but when I was white labeling this and we were developing it, I was like, no, everybody needs the profitability report.

Okay. What was your actual margin line by line on that project? Not the total, like the breakdown. Furniture, soft goods, custom, freight. Can you answer all of those questions? And if you can, rock on. I want you to notice what it took to get there and whether the process is documented anywhere. Or whether it lives entirely in your head.

Okay, and if you can't answer it, that's your gap. That's the data. That's what this episode is all about. So second thing, think about where your procurement information currently lives. If you have a team member who places orders, where do they record them? Is it connected to your billing process? Are you doing double entry? Is there one sort of truth or are there three?

Okay, just mapping that out, just getting honest about the current state is a useful exercise. It tells you exactly what you're working with and what would need to change for you to have really real data visibility. And if you do that and you realize the infrastructure's not there, that what you need isn't a process tweak but a real system with a real process behind it, go look at the profit mixer.

Okay, the link is in the show notes because it's built for exactly this.

Whew, y'all, that was one hell of an episode numero uno of this little series called Profit Isn't an Accident. And if this landed for you, if you found yourself nodding along or quietly recognizing parts of your business in what I described today, I want you to do one thing. Share this with another designer.

Okay, this industry is full of creative, talented, beautiful, hardworking people who are underpaying themselves and undervaluing their business because nobody handed them this information. You sharing this with one person in your world might be what changes something for them.

And of course, you can follow along with the series whenever you listen to podcasts and you can always find me at the designbakehouse.com or mysidemark.com. ⁓ Instagram is the design bakehouse. Come say hello. OK, next week, next week we're going to talk about the markup myth. Pricing the idea that cost plus 30 percent is a pricing strategy and why it isn't and what you should do instead.

Okay, we're going to talk about the minimum viable markup and what that actually looks like for a firm that is trying to be genuinely profitable. It's a business, not a hobby. Okay, this is not surviving. This is not breaking even. This is profitable. That episode is going to get specific and I think it's going to make for some very good conversation and it's going to make some of you very uncomfortable in the best possible way. So.

Thanks for being here. I will see you next week.